Letter from CA reguarding repayment

[tagalong]

I got a letter today from the CA who has my SL after contacting them last week to set up rehabilitation of my delinquent student loan.

 

The letter says:

 

Dear *tagalong*,

 

Our client has agreed to accept your monthly payment of $50. The initial payment must be received by this office on or before 8/25/05. Subsequent payments must be received by this office on or before the same date of each succeeding month. Please be advised that this schedule is conditioned upon timely receipt of all scheduled payments. Payments shall be credited to the outstanding balance and applied to interest, principal, attorney's fees if provided by the promissory note, and collection costs. Please note that interest shall accrue on the outstanding principal balance at the rate of 5.3% per annum, as specified in the defaulted guaranteed student loan promissory note.

 

All checks are to be made payable to this office as attorneys for the above stated client. Please be certain to clearly note your account number, as provided above, on each check.

 

The payment schedule is subject to review every three months from the date of the first payment. It is your obligation to contact this office at your scheduled time of review. Failure to do so shall constitute a default on this agreement.

 

Our client authorized the repayment schedule based on financial representations you made to this office. Enclosed herewith is a financial statement for your completion. This repayment schedule is subject to receipt and verification of the information already provided to this office as well as all information contained in the completed financial statement. All repayment schedules are subject to review at the time stated herein. The purpose of reviewing the repayment schedule is to analyze your financial condition and increase the scheduled payment or require payment in full, as your financial condition so warrants.

 

blah blah blah....

 

Then there is a page 2 that says:

 

If the terms of this agreement are honored as stated herein, our client will not proceed with further collection activity. However, our client and this office reserve the right to take any action deemed appropriate to protect its rights or comply with federal regulations or directives concerning your defaulted student loan. A failure by our client or this office to strictly enforce terms or conditions of the agreement shall not constitute a waiver of said terms and conditions. The agreement is not to be considered an accord, nor compliance therewith satisfaction.

Sincerely,

xxxx

 

Then enclosed also is a financial statement.

 

Now, can anyone explain what all of that means? and do I have to fill out and return the financial statement to them?? I made NO financial representations on the phone to them. The guy I spoke with said "Is $50/mo ok" when I asked what the monthly payment would be. That's the only thing I agreed to and made no representations whatsoever as to financial status. This is all kind of confusing to me and I don't really understand it.

 

Thanks!

[tagalong]

Anyone know about this? I'd really like to know if I am required to send them the financial statement. Please!

[LynnInMN]

Were you asking for "reasonable and affordable" rehab payments?? If so, then yes, you need to fill them out. If not, call them back and talk to a supervisor.

[tagalong]

I just called them and asked to rehab the loan and asked what the monthly payment would be. The guy I spoke with said "how about $50/mo" I agreed to that. I asked when it would be due each month and he stated whenever I wanted but suggested the 25th of each month...which I also agreed with. I didn't ask for any specific payment amount...this was the amount he set it up for. Should I call them back and if so what do I need to ask/tell them? Thanks!

[LynnInMN]

How much is your balance?

[tagalong]

$4092 total...just one loan

[LynnInMN]

The collector was lazy. The payment is fine...it is the regular payment for this size loan balance to complete. He was suppose to do the financial statement over the phone to complete the call properly. He basically skimmed the cream, meaning he did as little as possible to complete the call.

 

Once you start the rebab payment they cannot commence legal action. They just do not sue on a balance this size that is making voluntary payments.

Personally I would just start making the payments and screw the financial statement. Those are only required for "reasonalbe and affordable" payment plans.

[tagalong]

many thanks! I sent off the first payment today.

[Jeeplady]

Did your interest rate go up or stay the same under the default agreement? My loans were consolidated years ago at 8% and I can't shake it. They have been forbearanced and deferred so long the interest has doubled the principal. If I default can I get a lower rate??????/

[LynnInMN]

Did your interest rate go up or stay the same under the default agreement?  My loans were consolidated years ago at 8% and I can't shake it.  They have been forbearanced and deferred so long the interest has doubled the principal.  If I default can I get a lower rate??????/

<{POST_SNAPBACK}>

 

 

Nope. Your interest is entirely based on when you took it out and if it was a variable or fixed rate. You sound like you have a fixed.